HDFC Bank Q4 Result Review: Stable Show With Margin Expansion Being A Key Positive— Systematix Maintains 'Buy'

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Systematix Report

HDFC Bank Ltd. reported Q4 FY25 earnings of 171 billion which was supported by margin expansion and controlled opex increase. Overall, a good result with margin expansion and improving asset quality were the key positive highlights

Other key highlights for the quarter were:

1. Gross Advances (including IBPC) increased by 3.3% QoQ, 7.7% YoY and was led by retail (2.5% QoQ, 9% YoY) and CRB (5.6% QoQ, 12.8% YoY).

2. Deposit growth was 5.9% QoQ, 14.1% YoY. YoY basis, CASA growth was muted at 3.9% YoY, 8.2% QoQ while TD growth was strong at 20.3% YoY, 4.7% QoQ.

3. Margin performance remained strong with reported core NIM (% IEA) increased to 3.73% versus 3.62% in Q3 (+11bps QoQ, +3bps QoQ ex IT refund of Rs 7 billion in Q4 FY25).

4. Other income growth was also strong at 5% QoQ, 11% YoY supported by higher MTM gains of Rs 3.9 billion in Q4 vs 0.7 billion in Q3.

5. CIR (ex trading gains) declined to 40.2% vs 40.7% in Q3.

6. GNPA declined to 1.3% (-9bp QoQ) with major decline in corporate and wholesale GNPA at 1.49% vs 1.71%.

7. The bank delivered FY25 RoA of 1.8% vs FY24 RoA of 2%.

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